New Lebanon Town Court probed

Deficiencies, unacccounted funds found in state audit

Updated 4:22 pm, Wednesday, December 14, 2011

NEW LEBANON — The operations of the town court have been referred to the state Commission on Judicial Conduct for investigation of possible wrongdoing after a 45-page state audit found serious deficiencies and more than $9,000 in court funds unaccounted for.

Investigators from the office of state Comptroller Thomas DiNapoli reviewed the financial operations of the town's Justice Court from Jan. 1, 2008, to July 1, 2009, while two justices, Shaun McHugh and Darcy Poppey, presided.

"Internal controls over the Court's financial activities are significantly deficient," the audit released this week said. "The lack of basic controls has placed court moneys at significant risk of loss, misuse and fraud."

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The audit identified $9,050 as unaccounted for and $2,190 in questionable transactions, according to a copy of the report.

McHugh has since been replaced by Jessica Byrne following the 2009 elections.

Democrat Poppey, who was first elected in 2008, lost the election last month by one vote to Republican Jack Nevers. She is fighting the results in court before Rensselaer County Judge Robert Jacon. Jacon is expected to make a ruling on the matter Wednesday after hearing three days of testimony.

The funds include $4,865 in unaccounted for DMV fees, $2,350 in what DMV reported as unpaid traffic tickets that cannot be accounted for or were marked paid in town records, $300 in bail money not deposited and $1,535 missing or not accounted for in other accounts, according to the audit.

After their initial review, auditors expanded the probe, looking at canceled checks and deposit information from the court's bank accounts for the years 2006, 2007, 2008 and 2009. Auditors also reviewed McHugh's and Poppey's court checking accounts and bail accounts.

The report also states that unpaid fines were not routinely investigated and enforced, that the justices have not exercised adequate supervisory oversight and that there was a lack of policies to protect sensitive or personal information.

The audit cites an investigation of seven traffic court cases where defendants and lawyers confirmed they made payments totaling $845 but town court records contain no information funds were received. "There is a likelihood that these funds could have been lost or stolen," auditors reported.

In responding to the audit's findings, town attorney Andrew Howard said it is not solely the town board's responsibility to monitor operation of the justice court.

"The suggested remedies go beyond the statutory and constitutional authority of the town board," Howard stated in his response to the audit. He said the state Unified Court System and the justice court itself have oversight.

Poppey provided a long, detailed response to the audit, citing several instances where funds thought to be unaccounted for have been reconciled and added that the justices have instituted new procedures to better account for funds and traffic tickets.

"Every month, I review the bank statements in conjunction with the cash receipts journals to ensure that all moneys are accounted for," Poppey wrote in her response. "I also review all deposits at the end of each month and reconcile them with the audit and control report."